On news of its fourth-quarter report, Micron Technology, Inc. (NASDAQ:MU) shares are up modestly, about 3.5%. The earnings per share came to $2.02 and the revenues hit $6.14 billion, up 91% on a year-over-year basis. This actually beat Wall Street’s consensus, which was looking for $1.83 per MU stock and for the top line to come to $5.96 billion.
So why isn’t the MU stock price up more than 3.5%? Well, it’s important to keep in mind that the company had a pretty good run since early August.
Note that during this period MU stock gained about 24%. So it looks like much of the good news was already baked in.
Here are some other highlights for the quarter:
- MU’s capital expenditures came to $1.51 billion. In all, there is $6.15 billion in the bank.
- At the Mobile World Congress, MU announced its latest efforts for the autonomous vehicle market, such as low-power memory chips as well as security systems.
- The company opened a new facility in Boise, which will nearly double its cleanroom space for R&D efforts.
All in all, I’ve been a bull on MU stock for some time. And the Q4 report definitely confirms this position. The fact is that the demand for memory chips is likely to remain strong, driven by megatrends like mobile, cloud computing and AI (Artificial Intelligence).
The valuation on MU stock also remains attractive. Keep in mind that the forward price-to-earnings ratio is only 5.3X, which is really cheap for a growth company.
Tom Taulli runs the InvestorPlace blog IPO Playbook and is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
